In preparation for the 2016 Affordable Care Act (ACA) regulations, HAP is reviewing our groups that are currently considered “large,” but may be considered “small” in 2016. Group size will be determined by eligible employees. Employers with 1-100 eligible employees will be considered a small group in 2016; employers with 101+ eligible employees will be considered a large group in 2016.

How many eligible employees do you have?

Eligible employees include full-time employees (those who receive a W-2 form) who are employed, on average, at least 30 hours of service per week, plus full-time equivalent employees (FTEs).

To calculate the number of eligible employees, you need to first separate your full-time employees from all others. All of the “other” employees need to be calculated as full-time equivalent employees, as follows:

Add all of the hours for the non-full-time employees for the month and divide the total number of those hours by 120. This gives the number of FTEs.

Then add the number of FTEs to the total number of existing full-time employees to determine how many eligible employees there are.

For example:

ABC Company has 60 full-time employees (employed 30 or more hours per week on average). They have 20 employees employed an average of 15 hours per week.

At a very high-level, some of the ACA requirements for small groups and large groups include:

Small groups (1-100 in 2016)

If offering group health care coverage, the group must purchase a Qualified Health Plan (QHP). QHPs are ACAcompliant plans that cover Essential Health Benefits and follow established limits on cost-sharing. All QHPs are grouped in different metal levels – Platinum, Gold, Silver and Bronze – based on actuarial value, or the percentage of health care costs the plan covers. Premium prices are determined using per member/per month rating, the zip code of the business, and age rating ratio no greater than 3 to 1. These factors do not include health status, gender or industry type. This will be effective with the group’s 2016 renewal date.

Large groups (101+ in 2016)

In 2016, the employer must offer affordable health insurance coverage to at least 95 percent (currently 70 percent) of its full-time workers and their children and pay for at least 60 percent of the coverage. If not, the employer will be subject to taxes (Employer Shared Responsibility Payment).

The above information is for general guidance only. HAP recommends that you consult with your insurance agent and/or tax advisor to help understand the ACA regulations as they relate to employer group size.

Today, Congress passed a two-year delay of the 40 percent excise tax on high-cost employer-sponsored health plans, also known as the “Cadillac Tax.” This delay was part of a year-end tax extender and government funding package, the Consolidated Appropriations Act, 2016, known as the “Omnibus.” President Obama is expected to sign these changes into law.

The Omnibus includes several key changes pertaining to the Affordable Care Act:Excise Tax
Implementation of the 40 percent excise tax is delayed from 2018 to 2020. While the tax was originally non-tax deductible, the Omnibus changes that treatment and makes the tax deductible.
The 40 percent excise tax applies to the cost of employer health plan coverage exceeding certain threshold amounts, which were originally set for 2018 at $10,200 for individuals or $27,500 for families. These thresholds are indexed and will be higher on the delayed effective date in 2020. The Omnibus also calls for a study on how to determine adjustments to these thresholds to reflect age and gender differences between businesses.
Many employers, unions, insurers and industry groups have opposed the tax based on concerns around administrative and financial burdens for employers and adverse outcomes for employees.
The delay allows the government additional time to propose regulations. It also provides opportunity for stakeholders to provide comments, as well as prepare their long-term health benefits strategies.Health Insurance Industry Fee (a.k.a. Health Insurer Tax)
The Omnibus also suspends the Health Insurance Industry Fee for 2017. This fee began in 2014 and only impacts insured health plans.
We encourage you to bookmark Cigna’s health care reform website, http://www.informedonreform.com/, where we continuously update information as it becomes available.

The year 2015 is coming to a close, which means it’s time for business owners to think about renewing or purchasing a health insurance plan for the coming year. NRHA’s health insurance expert Bob Chiesa, president of Custom Benefits Insurance Group of Michigan, provides insight to some important questions employers should ask. Next month, stay tuned towww.nrha.org for our “Ask the Expert” video featuring Chiesa and Brett Slama, account executive from Member Insurance, for more helpful advice.

Is my current plan Affordable Care Act (ACA) compliant?In recent years, many new health insurance requirements have been introduced. While some carriers have taken a lead role in transitioning their groups and clients, ultimately, it is the employer’s responsibility to determine compliance. Business owners should be aware of two major changes that went into effect this year. A full-time employee is now defined under ACA as anyone working 30 or more hours per week. Additionally, the waiting period to offer employees medical insurance has been capped at 90 days. Due to these changes, many employers will have to offer coverage much sooner and to employees they may not have previously insured.

Do I need to comply with the Employer Mandate?Under ACA, employers with over 100 employees had to comply with the Employer Mandate in 2015. Beginning in 2016, employers of more than 50 employees will be required to comply. This requires all businesses of this size to offer a medical plan and requires employers to charge no more than 9.5 percent of the employee’s gross household income as the employee contribution. A unique strategy for employers who fall into this category is to offer base and buy-up plans. Under ACA, an employer is only required not to exceed the 9.5 percent rule for the lowest ACA compliant plan. Many employers are offering a base plan that costs much less. If the employees want to choose
a buy-up plan, then they pay the difference while still keeping the employer in compliance.

Does my plan offer a composite rate or do rates vary by age?Consider this: You have two equally qualified candidates for a job, but one is 32 years old and the other is 55 years old. As an employer, you’re put in an awkward situation knowing that hiring the younger employee could save you money on health insurance if rates vary by age, but you’re risking age discrimination if you consider that in your decision making. Due to health care reform, the majority of health insurance carriers for groups of fewer than 50 employees only offer rates by age. Moving forward, this will also affect groups of less than 100 employees. Consider how the type of rates offered by your carrier impacts your accounting and human resource departments.

Are the ACA and PCORI Fees and reinsurance fees included in the base rate?The Patient-Centered Outcomes Research Institute Fees, or PCORI Fees, are due once per year in July, and then an initial reinsurance fee is due in December. For 2016, the PCORI Fees increased from $2.00 to $2.08 per insured member. However, the reinsurance fee was reduced significantly from $63 down to $44 per insured member. It is important to note that these fees are per person, so for a family of four the rates would be multiplied times four. There are a small number of carriers that are building these rates into the base rate, yet many are not and several carriers are itemizing these fees at the bottom of your invoice. The key is to be familiar with these fees and to take them into consideration when comparing carriers.

NRHA currently offers a complete range of health care coverage available to retailers and their employees. If you have additional questions about health insurance related issues or would like more information on NRHA’s health insurance options, please contact Bob Chiesa at 888-201-7408 or visit www.cbigi.com/nrha-program.

Keep up with your New Years’ resolution to make healthy lifestyle changes!

Blue Cross Blue Shield is preparing to kick off the next round of Win by Losing, their weight-loss challenge designed specifically for BCBSM group customers. Since fall 2009, and throughout six rounds of the Win by Losing competition, participants from across the state of Michigan have discovered the benefits of taking personal responsibility for their health. Collectively, the teams have lost more than 46,000 pounds, more than 23 tons.

The eighth round of competition begins on Feb. 25, with registration opening on Feb. 18. In the next few weeks, BCBSM will be contacting group customers about the contest and providing them with all of the details they’ll need to know to register and get their team started.

First health system in Michigan to commit to performance-based reimbursement; The Physician Alliance also a key partner

St. John Providence Health System (SJPHS), and its five acute care hospitals across southeast Michigan, is the first health system in the state to partner with Blue Cross Blue Shield of Michigan on a new performance-based reimbursement model.

Under the agreement, the SJPHS hospitals will commit to achieving mutually-designed standards for successful patient outcomes in exchange for higher reimbursement. The agreement enables an organized system of health care by including The Physician Alliance as a key partner. The Physician Alliance is a 2,300-member physician organization that recently joined with SJPHS to form Partners in Care, a physician-health system entity created to manage the health of populations in the future.

Moving away from the traditional fee-for-service approach that is behind the huge growth of health care costs over the last decade, the agreement between BCBSM and St. John Providence on pay-for-performance contracting sets a new standard for how Michigan hospitals are paid by insurers.

This agreement truly breaks new ground. It leverages health insurance dollars not to encourage high volumes of services but rather high quality of care as measured by the successful treatment of hospital patients, said Susan Barkell, BCBSM senior vice president for Health Care Value. This is the first outcomes-based reimbursement arrangement between Blue Cross and a major Michigan hospital system. We recognize the leadership and foresight of St. John Providence for partnering with Blue Cross on it.

This kind of partnership with Blue Cross Blue Shield is exactly what we envisioned when St. John Providence Health System and The Physician Alliance formed Partners in Care in October, said Patricia Maryland, president and CEO of SJPHS. We are pleased that Blue Cross Blue Shield endorses the commitment we and our physician partners have made to a new era in health care that focuses on helping patients manage a lifetime of healthy choices and fewer episodes of illness.

Under the agreement, BCBSM will support the funding of infrastructure improvements necessary to better integrate care services between The Physician Alliance and the five hospitals under Partners in Care. Milestones will be established jointly between St. John Providence and BCBSM to ensure infrastructure work continues along with funding until 2013, when St. John Providence will include a performance-based reimbursement model in its next contract with BCBSM.

The agreement recognizes St. John Providence Partners in Care as a leading, innovative and clinically integrated health care organization that will be accountable for the delivery of patient-centric, coordinated, high-quality and compassionate health care.

This agreement integrates physician organizations and hospitals in ways that create a better system of health care that has the patient front-and-center throughout the care process, said Dr. Thomas Simmer, BCBSM senior vice president and Chief Medical Officer. We are building the future of Michigan health care with our partners at St. John Providence, and we encourage other hospital systems and physician groups to join us.

St. John Providence is part of Ascension Health, the nation’s largest Catholic and nonprofit health system. St. John Providence’s five acute-care hospitals include: